–The Zambia Credit Reporting Alliance has urged the government to come up with a micro guarantee fund which can be able to guarantee lending to Small and Medium Enterprises (SMEs) by way of risk sharing between commercial banks involved and government.
Alliance Chairman, Noel Nkhoma, says this will entail converging commitment with the passion towards uplifting SMEs and committing the fact that should the transaction go bad, both Government and the financial institution involved will take a 50-50 exposure.
Mr Nkhoma said this step has been taken in many countries including Nigeria where it has proved successful in ensuring lending to SMEs with the view to growing their businesses.
He said if the country was going to commit to grow the SMEs, it should allow a certain level of laxity in terms of credit processing.
He noted in an interview with ZANIS in Lusaka that banks are still honked to the traditional due diligence process of lending which in most cases excludes the SMEs.
Mr Nkhoma said if the country is going to be rigid in terms of credit processing, it will fail to achieve its intended goal of empowering the SMEs which are crucial to the growth of the country’s economy.
He said this does not mean that the nation should have a reckless lending policy in the market which he noted was not good for the economy.
Mr Nkhoma, however, stressed that it is important for the country to have a prudent lending policy but must also be alive to the fact that SMEs need special care products which the banking sector has at the moment failed to provide.